AZ Land List .com

Since the advent of the credit crunch, two odd years ago, the home loan indusrty has lived through the most dire period in it’s history. The once buoyant secured loan industry has been brought to it’s knees. Many secured loan lenders have withdrawn completely from the homeowner loan market, and it is unlikely if any of them will resurrect in the near futiure or at all. A large percentage of secured loan, mortgage and remortgage brokers have closed their doors. Some of the more fortunate of these homeowner loan brokers have reinvented themselves and reopened as letting agents. The rented property market’s recent growth is a sign of the chaos in the home loan sector with many people who would previously have bought their property being forced to rent instead.

This has been caused by the tightening up of underwriting criteria and the success rate of mortgage applications has been decimated. Many individuals who would have been accepted for a mortgage in the past are now surprised to frequently see their application being declined.First time buyers have been hard hit by the mortgage turmoil, and this is due to a large extent by mortgage lenders now requiring a 25% tp 30% deposit from first time buyers. This means that even if a first time buyer wants to purchase a relatively cheap property of £100,000, a £25,000 deposit or even more would be required, and not many people have this amount lying in their bank account. Compound this with legal fees, survey fees etc., and a sum close on £30,000 would be needed to buy your first home.

Interest rates for mortgages and remortgages seem to change in an almost daily basis, with one week fixed rates mortgages and remortgages being very favourable , and then the following week the rates rise, and standard variable rates become more attractive, and so on and so forth.

HSBC has just introduced what appears to be and “appears” I feel is the operative word, an amazingly low rate mortgage and remortgage rate of 1.9%. This is however a discounted variable rate for two years, but the rate could of course rise at any time. Also the maximum loan to value is 60% which rules out a large percentage of people from being eligible. The worse feature of this mortgage/remortgage plan to me is that there is a £1,119 unrefundable booking fee, and yes I did say non refundable. This means that with the current economic climate, a good percentage of those applying will be declined and will simply lose the sizeable sum of £1,199. Another bad undesirable feature with this mortgage is that there are no free legal or surveys fees. Therefore all considered, this so called low rate is at the end of the day not as desirable as it appears at first sight. Again it is a sign of the continuing turmoil in the home loan sector.

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